Bill Text: HI HB2315 | 2020 | Regular Session | Amended
Bill Title: Relating To Professional And Vocational Licensing Trust Funds.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2020-05-13 - Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM. [HB2315 Detail]
Download: Hawaii-2020-HB2315-Amended.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
2315 |
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THIRTIETH LEGISLATURE, 2020 |
H.D. 3 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO PROFESSIONAL AND VOCATIONAL LICENSING TRUST FUNDS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION
1. Section 444-26, Hawaii Revised
Statutes, is amended to read as follows:
"§444-26
Contractors recovery fund; use of fund; person injured; fees. (a) The board is authorized to establish and
maintain a contractors recovery fund from which any person injured by an act,
representation, transaction, or conduct of a duly licensed contractor, which is
in violation of this chapter or the rules adopted pursuant thereto, may recover
by order of the circuit court or district court of the judicial circuit where
the violation occurred, an amount of not more than $12,500 per contract,
regardless of the number of persons injured under the contract, for damages
sustained by the act, representation, transaction, or conduct. Recovery from the fund shall be limited to
the actual damages suffered by the claimant, including court costs and fees as
set by law, and reasonable attorney fees as determined by the court; provided
that recovery from the fund shall not be awarded to persons injured by an act,
representation, transaction, or conduct of a contractor whose license was
suspended, revoked, forfeited, terminated, or in an inactive status at the time
the claimant entered into the contract with the contractor.
(b) For purposes of this
chapter, "person injured" or "injured person" means and is
limited to owners or lessees of private residences, including condominium or
cooperative units, who have contracted with a duly licensed contractor for the
construction of improvements or alterations to the owners' or lessees' own
private residences and owners or lessees of real property who have contracted
with a duly licensed contractor for the construction of the owners' or lessees'
own private residences on the owners' or lessees' real property.
(c) When any person
applies for a contractors license, the person shall pay, in addition to the
person's original license fee, a fee of $150 for deposit in the contractors
recovery fund, and a fee for deposit in the contractors education fund as
provided in rules adopted by the director pursuant to chapter 91. In the event that the board does not issue
the license, these fees shall be returned to the applicant.
[(d) When the
contractors recovery fund attains a funding level of $420,893 in any fiscal
year, the board shall either:
(1) Cease accepting payments made by renewing
licensees; or
(2) Develop a process to refund monies in
excess of the $420,893 fund balance to licensees who paid into the fund, and
refund such monies.
If acceptance
of payments is ceased, it shall remain ceased until the funding level falls
below $420,893.]"
SECTION
2. Section 444-29, Hawaii Revised
Statutes, is amended to read as follows:
"[[]§444-29[]] Management of fund. (a)
The sums received by the contractors license board for deposit in the
contractors recovery fund shall be held by the contractors license board in
trust for carrying out the purposes of the contractors recovery fund. The contractors license board, as trustee of
the recovery fund, shall be authorized to retain private legal counsel to
represent the board in any action which may result in collection from the
contractors recovery fund. These funds
may be invested and reinvested in the same manner as funds of the state
employees' retirement system, and the interest from these investments shall be
deposited to the credit of the contractors education fund.
(b) The contractors education fund, which is
hereby created, shall be available to the contractors license board for
educational purposes[; provided that when the contractors education fund
attains a funding level of $15,315 in any fiscal year, the board shall either:
(1) Cease accepting payments made by renewing
licensees; or
(2) Develop a process to refund monies in
excess of the $15,315 fund balance to licensees who paid into the fund, and
refund such monies.
If acceptance of payments
is ceased, it shall remain ceased until the funding level falls below $15,315].
(c) Any law to the contrary notwithstanding, to
maintain a reasonable relation between the fees generated and the cost of
services rendered by the contractors recovery fund and the contractors
education fund, the board may make a finding that a fee adjustment is
appropriate and adjust the fees generated by renewals accordingly. For the purposes of finding that a fee adjustment
is appropriate in order to maintain a reasonable relation between the fees
generated and the cost of services rendered by the funds, the board's review
shall include the following:
(1) Frequency and timing of anticipated revenue to the fund;
(2) Identification
of a reserve amount based on unanticipated revenue reductions and historical
expenditures;
(3) Anticipated
expenses paid, including recovery payouts during a biennial budget cycle;
(4) Unanticipated
natural disasters or catastrophic weather events that may increase fund
payments; and
(5) Any statutory
adjustments to fund payout amounts.
The balance of the funds shall not exceed a sum
determined by the board. The sum shall
be determined by the board biannually."
SECTION 3. Section
467-11, Hawaii Revised Statutes, is amended to read as follows:
"§467-11 Fees; original license and biennial renewals.
(a) All fees for applications, registrations,
certificates, and any license prescribed by this chapter shall be deposited to
the credit of the compliance resolution fund established pursuant to section
26-9(o), and all fees allocated to the real estate education fund shall be as
provided in rules adopted by the director of commerce and consumer affairs
pursuant to chapter 91.
(b) The biennial renewal fee and completed
renewal application shall be submitted to the department of commerce and
consumer affairs on or before the commission-prescribed deadline and prior to
the expiration date of the license. All
real estate licenses expire on December 31 of an even-numbered year. Failure, neglect, or refusal of any duly
licensed real estate broker or real estate salesperson to pay the biennial
renewal fee and to submit a completed renewal application shall constitute a
forfeiture of the license as of January 1 of the subsequent odd-numbered year.
(c) The forfeited license of an individual real
estate broker or real estate salesperson may be restored upon compliance with
the licensing renewal requirements provided by law; submission of a complete
written application; payment of all applicable renewal fees, penalty fees,
compliance resolution fund fees, and, if applicable, recovery fund assessments;
satisfaction of the applicable requirements in sections 467-8 and 467-9;
submission of written documentation demonstrating compliance with section
467-11.5; and, for individual licensees, satisfaction of one of the following
as applicable:
(1) For a license forfeited for more than one year
but less than four years, the successful completion of the commission-approved
course or courses or passage of the commission-approved examination; or
(2) For a license forfeited for more than four
years but less than five years, the successful passage of the
commission-approved examination.
(d) The license of any individual licensed as a
real estate broker or a real estate salesperson who fails to apply for
restoration of a forfeited license within five years from the date of
forfeiture shall be automatically terminated.
Once a license has been terminated pursuant to this section, the
individual may apply for a new salesperson license pursuant to and subject to
all applicable laws and rules in effect at the time of application.
(e) The license of any real estate broker other
than a natural person that fails to apply for restoration of a forfeited
license within one year from the date of forfeiture, shall be automatically
terminated. Once a license has been
terminated pursuant to this section, the entity may apply for a new license
pursuant to and subject to all applicable laws and rules in effect at the time
of application.
(f) A real estate broker or real estate
salesperson may place that person's license on an inactive status by filing an
application and setting forth information prescribed or required by the commission;
the license shall be renewed on or before the commission-prescribed deadline
prior to the expiration date of the license by payment of the biennial renewal
fee and submission of a completed renewal application. A real estate broker or real estate salesperson
may reactivate that person's inactive license by satisfying section 467-11.5,
filing an application setting forth any information as may be prescribed or
required by the commission, and paying the proper fee.
(g) The commission may refund any fee erroneously
paid to it under this section when the commission deems it just and equitable.
[(h) If the education fund balance attains a
funding level of $1,713,510 in any fiscal year, the commission shall either:
(1) Cease accepting payments made by renewing
licensees; or
(2) Develop a process to refund monies in
excess of the $1,713,510 fund balance to licensees who paid into the fund, and
refund such monies.
If acceptance of payments is ceased, it shall remain ceased
until the funding level falls below $1,713,510.]"
SECTION
4. Section 467-16, Hawaii Revised
Statutes, is amended to read as follows:
"§467-16 Real estate recovery fund; use of fund; fees. (a)
The commission shall establish and maintain a trust fund which shall be
known as the real estate recovery fund from which any person aggrieved by an
act, representation, transaction, or conduct of a duly licensed real estate
broker, or real estate salesperson, upon the grounds of fraud,
misrepresentation, or deceit, may recover upon the commission's settlement of a
claim or by order of the circuit court or district court of the county where
the violation occurred, an amount of not more than $25,000 per transaction for
damages sustained by the fraud, misrepresentation, or deceit, including court
costs and fees as set by law, and reasonable attorney fees as determined by the
court.
(b) When any person makes application for an
original license to practice as a real estate broker or salesperson the person
shall pay, in addition to the person's original license fee, a real estate
recovery fund fee as provided in rules adopted by the director of commerce and
consumer affairs pursuant to chapter 91 for deposit in the real estate recovery
fund. If the commission does not issue
the license, this fee shall be returned to the applicant.
(c) The commission, as the trustee of the real
estate recovery fund, shall be authorized to expend the funds to:
(1) Retain private legal counsel to represent the
commission in any action involving or which may result in payment from the real
estate recovery fund;
(2) Retain a certified public accountant for
accounting and auditing of the real estate recovery fund;
(3) Employ necessary personnel, not subject to
chapter 76, to assist the commission in exercising its powers and duties with
respect to the real estate recovery fund; and
(4) Retain a consultant to recover and collect any
payments from the real estate recovery fund plus interest from the judgment
debtor.
[(d) When the real estate recovery fund attains a funding
level of $481,799 in any fiscal year, the commission shall either:
(1) Cease accepting payments made by renewing
licensees; or
(2) Develop a process to refund monies in
excess of the $481,799 fund balance to licensees who paid into the fund, and refund
such monies.
If
acceptance of payments is ceased, it shall remain ceased until the funding
level falls below $481,799.]"
SECTION 5. Section
467-19, Hawaii Revised Statutes, is amended by amending subsection (a) to read
as follows:
"(a) The sums received by the real estate
commission for deposit in the real estate recovery fund shall be held by the
commission in trust for carrying out the purpose of the real estate recovery
fund. The real estate commission, as the
trustee of the recovery fund, shall be authorized to expend the funds to retain
private legal counsel to represent the commission in any action involving the
real estate recovery fund. These funds
may be invested and reinvested in the same manner as funds of the state
employees retirement system, and the interest from these investments shall be
deposited to the credit of the real estate education fund, and which shall be
available to the commission for educational purposes, which is hereby
created. The real estate commission, as
trustee of the real estate education fund, may invest and reinvest the real
estate education fund in the same manner as funds of the state employees
retirement system. Any law to the
contrary notwithstanding, the commission may make one or more findings that a fee
adjustment is appropriate and may adjust the fees generated to regulate the
fund balances of the real estate recovery fund and the real estate education
fund to appropriate levels to maintain a reasonable relation between the fees
generated and the cost of services rendered by the real estate recovery fund
and real estate education fund. The
commission for investment purposes, may combine the real estate education and
recovery funds and invest and reinvest the combined funds in the same manner as
funds of the state employees retirement system.
The commission shall keep separate accounting records for the two funds. For the purposes of finding that a fee
adjustment is appropriate in order to maintain a reasonable relation between
the fees generated and the cost of services rendered by the funds, the
commission's review shall include the following:
(1) Frequency and timing of anticipated revenue to the fund;
(2) Identification
of a reserve amount based on unanticipated revenue reductions and historical
expenditures;
(3) Anticipated
expenses paid, including recovery payouts during a biennial budget cycle;
(4) Unanticipated
natural disasters or catastrophic weather events that may increase fund
payments; and
(5) Any statutory
adjustments to fund payout amounts.
The balance of the funds shall not exceed a sum
determined by the commission. The sum
shall be determined by the commission biannually."
"(b) The commission
shall use all moneys in the condominium education trust fund for purposes
consistent with subsection (a). Any
law to the contrary notwithstanding, the
commission may make a finding that a fee adjustment is appropriate and adjust
the fees paid by associations to regulate the fund balance to an appropriate
level to maintain a reasonable relation between the fees generated and
the cost of services rendered by the condominium education trust fund. For the
purposes of finding that a fee adjustment is appropriate in order to maintain a
reasonable relation between the fees generated and the cost of services
rendered by the fund, the commission's review shall include the following:
(1) Frequency and timing of anticipated revenue to the fund;
(2) Identification
of a reserve amount based on unanticipated revenue reductions and historical
expenditures;
(3) Anticipated
expenses paid, including recovery payouts during a biennial budget cycle;
(4) Unanticipated
natural disasters or catastrophic weather events that may increase fund
payments; and
(5) Any statutory
adjustments to fund payout amounts.
The balance of the fund shall not exceed a sum
determined by the commission. The sum
shall be determined by the commission biannually."
SECTION
7. Section 514B-72, Hawaii Revised
Statutes, is amended to read as follows:
"§514B-72
Condominium education trust fund; payments by associations and
developers. (a) Each project or association with more than
five units shall pay to the department of commerce and consumer affairs:
(1) A condominium education trust fund fee within
one year after the recordation of the purchase of the first unit or within
thirty days of the association's first meeting, and thereafter, on or before
June 30 of every odd-numbered year, as prescribed by rules adopted pursuant to
chapter 91; and
(2) Beginning with the July 1, 2015, biennium
registration, an additional annual condominium education trust fund fee in an
amount equal to the product of $1.50 times the number of condominium units
included in the registered project or association to be dedicated to supporting
mediation or voluntary binding arbitration of condominium related
disputes. The additional condominium
education trust fund fee shall total $3 per unit until the commission adopts
rules pursuant to chapter 91. On June 30
of every odd-numbered year, any unexpended additional amounts paid into the
condominium education trust fund and initially dedicated to supporting mediation
or voluntary binding arbitration of condominium related disputes, as required
by this paragraph, shall be used for educational purposes as provided in
section 514B-71(a)(1), (2), and (3).
(b) Each developer shall pay to the department of
commerce and consumer affairs the condominium education trust fund fee for each
unit in the project, as prescribed by rules adopted by the director of commerce
and consumer affairs pursuant to chapter 91.
The project shall not be registered and no effective date for a
developer's public report shall be issued until the payment has been made.
(c) Payments of any fees required under this
section shall be due on or before the registration due date and shall be
nonrefundable [except as specified in subsection (e). Unless acceptance of payments is ceased pursuant
to subsection (e), failure]. Failure
to pay the required fee by the due date shall result in a penalty assessment of
ten per cent of the amount due and the association shall not have standing to
bring any action to collect or to foreclose any lien for common expenses or
other assessments in any court of this State until the amount due, including
any penalty, is paid. Failure of an
association to pay a fee required under this section shall not impair the validity
of any claim of the association for common expenses or other assessments, or
prevent the association from defending any action in any court of this State.
(d) The department of commerce and consumer
affairs shall allocate the fees collected under this section to the condominium
education trust fund established pursuant to section 514B-71. The fees collected pursuant to this section
shall be administratively and fiscally managed together as one condominium
education trust fund established by section 514B-71.
[(e) When the
condominium education trust fund attains a funding level of $1,819,971 in any
fiscal year, the commission shall either:
(1) Cease accepting payments made by projects
and associations at each biennial registration; or
(2) Develop a process to refund monies in
excess of the $1,819,971 fund balance to projects and associations that paid
into the fund at applicable biennial registrations, and refund such monies.
If acceptance of payments is ceased, it shall remain ceased
until the funding level falls below $1,819,971.]"
SECTION
8. Act 29, Session Laws of Hawaii 2019,
is amended by amending section 18 to read as follows:
"SECTION
18. This Act shall take effect on July
1, 2019; provided that:
(1) Section 3 shall take effect on June 28, 2019; and
(2) Sections 7, 8, 10,
11, and 12 of this Act shall take effect on July 1, 2020[, and shall be
repealed on June 30, 2022; provided further that sections 444-26, 444‑29,
467-11, 467-16, and 514B-72, Hawaii Revised Statutes, shall be reenacted in the
form in which it read prior to the effective date of this Act]."
SECTION 9.
Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 10. This Act shall take effect on July 1, 2050; provided that the amendments made by this Act shall take effect on July 1, 2020, and shall supersede any contrary amendments made by Act 29, Session Laws of Hawaii 2019.
Report Title:
Contractors Recovery Fund; Contractors Education Fund; Real Estate Recovery Fund; Real Estate Education Fund; Condominium Education Trust Fund; Department of Commerce and Consumer Affairs
Description:
Allows the contractors license board and real estate commission to adjust, reduce, suspend, or cease collection of recovery fund and education fund fees to maintain a reasonable relation between the fees generated and the cost of services rendered by the funds. Caps the contractors recovery fund, contractors education fund, real estate recovery fund, real estate education fund, and condominium education trust fund at amounts determined biannually by the contractors license board or real estate commission. Effective 7/1/2050. (HD3)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
